Thursday

16th Aug 2018

Merkel wants 'permanent' supervision of Greece, warns of war

  • 'Nobody should take peace for granted,' says Merkel (Photo: Valentina Pop)

Peace should not be taken for granted if the euro fails, German chancellor Merkel told MPs Wednesday (26 October) ahead of the eurozone summit where an increase of the bail-out fund firepower may lead to Germany's own state assets being taken as collateral.

In a dark blue jacket reflecting the mood in and about the eurozone, Merkel abandoned her usual cautious rhetoric warned outright of a war.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

"Nobody should take for granted another 50 years of peace and prosperity in Europe. They are not for granted. That's why I say: If the euro fails, Europe fails," Merkel said, followed by a long applause from all political groups.

"We have a historical obligation: To protect by all means Europe's unification process begun by our forefathers after centuries of hatred and blood spill. None of us can foresee what the consequences would be if we were to fail."

"It cannot be that sometime in the future they say the political generation responsible for Europe in the second decade of the 21 century has failed in the face of history," the chancellor continued.

She was asking for the parliament's "political" green light on a negotiation mandate for the EU summit, beginning later today in Brussels. The summit is seeking to increase the firepower of the €440 billion-strong European Financial Stability Facility (EFSF) to stop the sovereign debt crisis spreading to countries like Italy and ultimately, France.

The Bundestag approved the measure by a large majority, with 503 members in favour, 89 opposing and four abstaining.

German 'risks'

While stressing that Germany's contribution to the EFSF loan guarantees would continue to be capped at €211 billion, she said she could not exclude there may be "risks" for Germany linked to the EFSF increase of firepower. Her own party colleagues had demanded that she clearly excludes German state assets, such as the central bank's gold reserves, to be put as collateral for the EFSF lending power.

"Nobody can clearly estimate if there will be such risks. What I can say is that we cannot exclude it," she said, insisting that the current situation is pushing European leaders into "uncharted territories".

"Not to take these risks would be irresponsible. There is no better and more sensible alternative. Europe and the world are looking at Germany," the chancellor said.

Looking ahead to the summit, the chancellor repeated her long-standing stance that "there is no silver bullet, no simple solutions. We will still deal with these topics for years from now."

She repeated her insistence that the EU treaty had to be changed, in the medium term, to be more strict on countries breaching the euro deficit rules.

"Where does it say that any treaty change has to take 10 years or that there should be no more changes after the Lisbon Treaty," she asked.

EU leaders last Sunday agreed to have an evaluation presented to them in December by council chief Herman Van Rompuy about the possibility for a "limited" treaty change.

'Permanent supervision' for Greece

On the three euro-countries currently propped by EU-IMF loans, Merkel said Ireland was on "the right path", Portugal showed it could implement the promised reforms, while Greece was still "at the beginning of a long road."

For the first time, as opposition MPs noted later on in the debate, Merkel had words of praise for the ordinary Greek citizens feeling the brunt of the austerity measures demanded by international lenders. "People in Greece have to stomach a lot of sacrifices. They deserve our respect and also a sustainable growth perspective in the eurozone."

According to the latest report of the so-called troika, consisting of experts sent from the European Commission, the European Central Bank and the International Monetary Fund, Greece will need even higher debt restructuring and losses for private lenders compared to what EU leaders had agreed upon on 21 July.

"But debt restructuring alone does not solve the problem. Painful structural reforms have to be made, otherwise even after debt restructuring we're back to where we are today," Merkel warned.

That's why, she said, Greece would have to be "assisted" for quite some time. "It's not enough that the troika comes and goes every three months. It would be desirable to have a permanent supervision in Greece," she said, adding that this issue would be brought up at the summit.

In return for what seems to be an unprecedented sovereignty loss in an old EU member state, Merkel promised German investments and mentioned a meeting of local representatives from Germany and Greece in the coming weeks.

"We want Greece to be back on its feet again as soon as possible and will do everything we can to this end," she concluded.

Her junior coalition party, the Liberal Free Democrats (FDP), had less sympathy for Greece, however. Rainer Bruederle, leader of the FDP group, said that the troika had given Athens a "D" and that "nobody expects Greece to turn into an A student over night," as it was now just like eastern-European transition countries 20 years ago.

Sticking to the teacher-pupil metaphor, Bruederle urged Greeks to "do their homework" and said the country could not be funded endlessly like a "bottomless pit".

The leftist opposition was outraged, with Die Linke leader Gregor Gysi pointing out that austerity has forced 27,000 small and medium enterprises to go bankrupt in Greece and that teachers earn as little as €1,000 a month. "What more do you want from them? Do you want them to starve to death?" he said.

Merkel outlines steps to 'stability union'

German Chancellor Angela Merkel has called for a "stability union" in which all member states behave in a fiscally responsible manner and miscreants can be brought before the EU’s highest court.

Germany makes Greece pay with sovereignty for new bail-out

Greek sovereignty was taken down another peg by eurozone leaders on Thursday, as Germany demanded a "durable" supervision on the ground of its economic policy-making under the terms of a second €130 billion bail-out.

Poland fears German 'inactivity' more than German power

Poland has issued an extraordinary appeal to Berlin to do all it takes to save the eurozone, saying that only Germany can manage the task and has a "special responsibility" to do so given its history.

Europe still has 'sleeping war demons'

Former Eurogroup chief Jean-Claude Juncker has warned of "sleeping war demons" in Europe and compared the current situation to the year before the outbreak of the first world war, when everybody took peace for granted.

News in Brief

  1. MEPs blast UK 'alphabetical approach' on citizens rights
  2. EU hits back over Salvini's blame for bridge collapse
  3. Poll: Sweden's social democrat-led government set to win again
  4. Genoa in state of emergency following bridge collapse
  5. EU summertime survey closes Thursday
  6. Putin to attend Austrian foreign minister's wedding
  7. Salvini questions EU 'constraints' after bridge collapse
  8. Bosnian Serbs to rewrite 1995 Srebrenica genocide report

Opinion

Has the time finally come for 'European champions'?

Since Emmanuel Macron took the French presidency in 2017, the concept of consolidating European industries to create continental 'champions', capable of competing on a global scale, has been revived.

EU 'tax lady' hits Google with record fine

Margrethe Vestager has fined the US tech giant with €4.34bn for abusing its market dominance in mobile operating systems - but assured US president Donald Trump that it is not because she does not like America.

Stakeholders' Highlights

  1. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  2. IPHRCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  3. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  4. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  5. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  6. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  7. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  8. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  9. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  10. Mission of China to the EUChina: Work Together for a Better Globalisation
  11. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  12. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma

Latest News

  1. Brexit talks resume as chance of 'no deal' put at 50:50
  2. US trial sheds light on murky Cyprus-Russia links
  3. Burned cars fuel Swedish election debate
  4. EU court to hear citizens' climate case against EU
  5. How long can Bulgaria keep facing both East and West?
  6. EU commission steps up legal case against Poland
  7. Separation of powers instead of 'Spitzenkandidat' process
  8. Revealed: ExxonMobil's private dinner with Cyprus' top EU brass

Stakeholders' Highlights

  1. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  2. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  3. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future
  4. ACCAEmpowering Businesses to Engage with Sustainable Finance and the SDGs
  5. Nordic Council of MinistersCooperation in Nordic Electricity Market Considered World Class Model
  6. FIFAGreen Stadiums at the 2018 Fifa World Cup
  7. Mission of China to the EUChina and EU Work Together to Promote Sustainable Development
  8. Counter BalanceEuropean Ombudsman Requests More Lending Transparency from European Investment Bank
  9. FIFARecycling at the FIFA World Cup in Russia
  10. Nordic Council of MinistersOECD Report: Gender Equality Boosts GDP Growth in Nordic Region
  11. Centre Maurits Coppieters“Peace and Reconciliation Is a Process That Takes Decades” Dr. Anthony Soares on #Brexit and Northern Ireland
  12. Mission of China to the EUMEPs Positive on China’s New Measures of Opening Up

Join EUobserver

Support quality EU news

Join us